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1985 (6) TMI 176

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..... t orders made on 29th September, 1973, and 30th April, 1974. Against the said orders of the CTO the petitioner filed appeals under section 20 of the Act before the Deputy Commissioner of Commercial Taxes (Appeals), Bellary ("DC"), inter alia contending that the paddy converted into rice had not undergone manufacturing process and his purchase turnovers were not exigible to tax under section 6 of the Act. On 14th March, 1975, the DC following a Division Bench ruling of this Court in State v. B. Raghurama Shetty [1975] 35 STC 360 which had been challenged by the State in an appeal before the Supreme Court and pending, allowed the same. On 24th March, 1981, the Supreme Court allowed the said appeal filed by the State and has reversed the decision of this Court, since reported as State of Karnataka v. B. Raghurama Shetty [1981] 47 STC 369. 2-2. On 18th March, 1977, the DC forwarded the records of his office in the appeal filed by the petitioner to the Commissioner of Commercial Taxes, Karnataka, Bangalore ("Commissioner"), "for needful action", which was received by him on 23rd March, 1977. On receipt of the records in the above appeal and the connected cases, the office prepared a .....

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..... jurisdiction and illegal. 4.. In justification of the show cause notice issued to the petitioner in Writ Petition No. 13992 of 1981, the Commissioner who is the sole respondent in the case has filed his return. Without disputing the correctness of the facts stated by the petitioner in that writ petition, the respondent has urged that he had exercised his power or had initiated the proceedings within a period of four years from the date of the order and the impugned show cause notice was within his jurisdiction and power and was not barred by time. 5.. Sri K. Srinivasan, the learned Advocate, has appeared for the petitioners in all the cases except in Writ Petition No. 21641 of 1981. Sri K.R. Prasad, the learned Advocate, has appeared for the petitioner in Writ Petition No. 21641 of 1981. Sri S. Rajendra Babu, the learned Government Advocate, has appeared for the respondent in all the cases. 6.. In Mohamed Samiullah v. Commissioner of Commercial Taxes [1986] 61 STC 107; ILR (1985) Kar 481 a Full Bench of this Court has upheld the validity of section 22-A of the Act and also the power of the Commissioner to revise the appellate orders of the appellate authorities subordinate t .....

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..... a Shetty's case on that decision, the Commissioner did not issue show cause notices till the period of four years from the date of the order had elapsed and has issued such notices on the disposal of the appeal filed by the State in Raghurama Shetty's case before the Supreme Court. It is in these circumstances, the Commissioner issued notices later. In his show cause notice issued to the petitioner in Writ Petition No. 16098 of 1981, the Commissioner has stated that the same was not barred by time for the following reason: " 8. In your case the records have been received for examination in this office on 23-3-1977 which date is well within the period of limitation and, therefore, action under section 22-A in your case is not barred by limitation." In other cases also, the Commissioner specifying the necessary particulars has stated this very reason. An examination of the records produced by the learned Government Advocate amply bare out the correctness of these facts. 11.. Section 22-A(1) of the Act empowers the Commissioner to call for the records and examine them. When the records are received by him on the very authority suo motu submitting them; as in the present cases, i .....

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..... , the Full Bench has referred to some of the rules of construction bearing on the same and to the Full Bench ruling of this Court in C. Arunachalam v. Commissioner of Income-tax [1985] 151 ITR 172 [FB]; ILR (1984) 2 Kar 1387 [FB] that has explained some of them. In ascertaining the true scope and ambit of section 22-A(2), we must necessarily have regard to them and the progressive rules of construction of statutes felicitously expressed by Lord Denning in Seaford Court Estates Limited v. Asher [1949] 2 All ER 155 at 164 approved by the Supreme Court in State of Karnataka v. Hansa Corporation AIR 1981 SC 463 and K.P. Varghese v. Income-tax Officer, Ernakulam [1981] 131 ITR 597 (SC). In Arunachalam's case [1985] 151 ITR 172 (Kar) [FB]; ILR (1984) 2 Kar 1387 [FB], the Full Bench has ruled thus: "So far as the fiscal statutes are concerned, we must remember one more principle. The provisions in a fiscal statute are not to be so construed as to furnish a chance of escape and a means of evasion. In case of doubt, the fiscal statute should be construed in favour of and beneficial to the subject." Bearing this and the principles enunciated in the above cases, we propose to ascertain th .....

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..... .." (vide: Words and Phrases-Permanent Edition-Vol. 15A, page 356). On these meanings that are apposite in the context, the term "exercisable" must, at any rate, mean taking action or doing something, if not doing something with which aspect, we are not concerned in these cases. On these meanings, the application of mind by the Commissioner and his decision to await the decision of the Supreme Court, clearly falls within the meaning of the term "exercisable" or "initiation" used in the two cases of this Court noticed earlier. If the Commissioner bad thus initiated action within four years as ruled in Subba Rao's [1967] 19 STC 257 (Kar) and Busunur Industries' [1986] 61 STC 123 (Kar); ILR (1985) Kar 1322 cases, it is undoubtedly open to him to complete the same even after the expiry of four years. 17.. When the Commissioner examined the records and decided to await the decision of the Supreme Court, we cannot say that he committed a blunder or an illegality. All that one could reasonably contend is that he should have at least issued show cause notices and then awaited the decision of the Supreme Court or pursued the matter after the Supreme Court rendered its decision in Raghur .....

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